Lyft Inc (NASDAQ:LYFT) shares fell about 13% at the open on Wednesday after the ride-hailing company reported fourth quarter results that met revenue expectations but offered a softer profitability outlook, with analysts pointing to slowing ride growth and competitive pressures.
For the fourth quarter, Lyft reported adjusted earnings of $0.16 per share, above the $0.12 per share expected by analysts. Adjusted revenue was $1.76 billion, up 3% and in line with consensus estimates.
Lyft reported gross bookings of $5.1 billion for the quarter, up 19% year over year.
For the full year 2025, Lyft reported gross bookings of $18.5 billion, up 15% year over year, and revenue of $6.3 billion, up 9%. Net income was $2.8 billion, compared with $22.8 million in 2024.
Operationally, rides grew 14% in 2025 to 945.5 million, and active riders reached 29.2 million in the fourth quarter, up 18% year over year, with 51.3 million for the full year. Lyft also highlighted the launch of Lyft Teen, targeting riders aged 13 to 17.
The company forecast first quarter adjusted EBITDA of $120 million to $140 million, compared with analysts’ expectations of about $139.8 million, which weighed on the stock.
Jefferies analysts described the quarter as “a mixed bag” and reiterated a ‘Hold’ rating, citing a deceleration in ride growth and uncertainty around demand trends.
They wrote that upside in Q4 EBITDA “was overshadowed by a surprising slowdown in Rides growth,” noting that rides grew about 11% year over year, below both consensus expectations and prior guidance for mid- to high-teens growth. Lyft said the roughly 350 basis-point deceleration was driven by competitive promotional activity in December and that it was “prioritizing durable financial performance over dilutive volume.”
Jefferies also flagged that key expected tailwinds from California insurance savings had not yet materialized, saying the company “has yet to observe an uptick in demand in California from passing through insurance savings,” and now expects the benefit to show up in the second half of 2026.
The analysts noted that Q1 EBITDA guidance was about 7% below consensus and reflected a contraction in incremental margins, adding that “investors were looking for insurance savings to flow to higher 1Q EBITDA.”
The firm also raised concerns about potential market share losses, noting that organic bookings growth was stable at around 12% year over year and could imply share pressure given faster growth at competitors.
Jefferies believes steady market share is key to Lyft’s long-term earnings trajectory and that “tradeoffs prioritizing near-term profit at the expense of Rider growth could jeopardize long-term earnings potential.”
As such, the firm lowered its price target to $15.50 from $20, citing reduced visibility on growth drivers and lower long-term EBITDA expectations.